Author Topic: T-Mobile and Sprint are getting closer to merging  (Read 15409 times)

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droid

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T-Mobile and Sprint are getting closer to merging
« on: May 22, 2019, 06:15:25 AM »


Back in 2011, when T-Mobile was the nation's fourth-largest carrier but practically irrelevant in the states, AT&T agreed to buy the company for $39 billion. That deal faced intense regulatory scrutiny and was blocked by the Justice Department. As a result, AT&T backed out of the deal and was forced to hand over $3 billion and 128 AWS markets to T-Mobile under the terms of their agreement. Then, in 2014, Sprint and T-Mobile raised the idea of a merger as a trial balloon with the FCC and DOJ. Both agencies basically told the two companies not to bother.

Now, with T-Mobile the most innovative and fastest growing of the four major U.S. wireless operators, it no longer needs a merger to survive. However, with the next generation of wireless connectivity in its very early days, Sprint's hoard of mid-range 2.5GHz spectrum happens to mesh well with T-Mobile's low-band treasure trove of 600MHz airwaves. And despite having a deep-pocketed parent in Japan's SoftBank, Sprint has been struggling for a few years now. Speaking of deep-pocketed parents, T-Mobile is majority owned by Germany's Deutsche Telekom. After the merger, the latter will own 42% of the combined company while the former will have a 27% stake.

If the deal is approved by the FCC, which seems likely, and the Justice Department also concurs, both companies will have until July 29th to close the transaction unless it is extended again. The original deadline for closing the deal was pushed back from April 28th to July 29th. Part of the delay was due to changes that T-Mobile made to documents it filed with the FCC regarding projections it made related to the merger. The FCC also had to halt its review during the government shutdown, which lasted a little over one month, and again in March to allow consumers to comment on the transaction.

The Communications Workers of America (CWA) union complained that the deal will result in the loss of 28,000 jobs, mostly from the shuttering of overlapping stores. T-Mobile CEO John Legere says that with the number of new customer service operators needed to man the phones, the deal will add 3,000 new employees in year one and 11,000 by 2024.

So with one regulatory agency down and one to go, T-Mobile and Sprint merger are so close to completing their merger that it might be time to order the new stationery.